When you reduce invoices, the system creates an invoice and a credit memo simultaneously. When you accept the price variance, the GR/IR clearing account is cleared in the invoice, and the price difference is subsequently debited to the stock account. The difference of $360 between the two amounts and the invoiced amount is posted to a clearing account for vendor invoice reduction.

The posting to the clearing account for vendor invoice reduction is cleared in the credit memo that is created. The offsetting entry is posted to the vendor account.

The tax posted in the invoice is based on the item amount entered. The credit memo corrects the tax posting.

Together, the invoice and the credit memo create the liability that results on the basis of the changed proposed data.